POLITICS

Ottawa, Ontario reportedly hiring bankers for GM sale

08/01/2013 01:00 EDT | Updated 10/01/2013 05:12 EDT
The governments of Canada and Ontario are speaking to investment bankers about how to handle the sale of their remaining stake in General Motors, according to multiple reports published Thursday.

According to Bloomberg and Sky News, the federal and Ontario governments have been searching for an investment bank to stickhandle a possible sale of the company.

In early 2009, along with the U.S. government, Canada and Ontario offered GM a multibillion-dollar lifeline to keep the company afloat as the financial crisis was beginning. In exchange for more than $10 billion of loans and debt forgiveness, Ottawa and Ontario received 11.7 per cent of GM's common stock, and more than $400 million worth of preferred shares.

November 2010 IPO

In addition to separate debt repayments of cash, the two governments got part of those funds back when they sold 35 million shares as part of GM's larger initial public offering in late 2010, for $33 US a share. But they still own more than 140 million shares, good enough to be the third-largest current individual investor in the company. At current prices, that stake is worth more than $5 billion.

In June, the U.S. government sold 30 million shares at more than $34 per share. GM shares have gained more than 25 per cent on the NYSE this year.

Canadian Finance Minister Jim Flaherty has repeatedly said Canada does not want to be a long-term owner of the company, but has declined to offer any sort of timeframe for a divestment.

"The Government of Canada remains committed to exiting from ownership of GM as quickly as feasible, while maximizing the value of the Government’s interests for Canadian taxpayers," a spokesperson for the Finance Minister told CBC News in an emailed statement Thursday.

The spokesperson added that the government entity that holds the shares "examines, on an ongoing basis, opportunities to divest those shares."